Cuts to Medicaid program headed to the governor

By Ashley Griffin and Jamey Dunn

Gov. Pat Quinn is close to his wish of having comprehensive Medicaid reform done by the end of this week.

A bill that would make massive changes to Illinois’ Medicaid system is on its way to his desk. On Thursday, Senate Bill 2840, which aims to cut $1.4 billion to $1.6 billion from the state’s Medicaid liability, passed the House with 94 “yes” votes and 22 “no” votes. It was approved in the Senate, 44-13.

The proposed plan includes tighter eligibility checkups, which would be conducted by an independent vendor, rate cuts to some providers and reduction and elimination of some services. The proposed plan emphasizes changes to utilization controls, which would limit how many times a patient could use a certain service or cap the cost of treatment he or she could receive. The cuts to services include:

• Eliminating coverage for group therapy for nursing home residents, chiropractic care for adults and in-patient detoxification programs. 
• Eliminating adult dental care other than emergency treatment. In emergency situations, such as infections, the program would cover patients getting teeth pulled. 
• Eliminating the Illinois Cares Rx program, which helps seniors pay for prescription drugs. 
• Requiring a $2 copay for prescription drugs.
• Capping hearing, speech, occupational and physical therapy at 20 sessions. 
• Limiting patients to four prescriptions per month. Three of the prescriptions could be brand name drugs. 
• Limiting patients to one pair of eyeglasses every two years. 
• Requiring prior approval for the repair or replacement of equipment, such as prostheses and wheelchairs 

“It is not without pain. The intent really is to minimize the hurt,” Chicago Democratic Sen. Heather Steans, who sponsored the bill in the Senate, said about the legislation.

The bill also contains rate cuts to some health care providers. Larger, for-profit hospitals would see a 3.5 percent reduction in the rates they are paid for providing Medicaid services, but safety net hospitals and rural “critical access” hospitals would be safe from the rate cut. Other providers would see a 2.7 percent rate reduction, but some, such as physicians and dentists, would be exempt from that cut.

Most provider organizations signed off on the rate cuts, but Department of Healthcare and Family Services Director Julie Hamos said the reductions were the result of difficult negotiations. “Nobody’s OK with this proposal, truthfully. Every single provider group, I think, would like to step before you and tell you that they’re not exactly OK with any of this,” she said. “We did do a lot of work with them. We really tried to understand how we could create a tighter system.” And Hamos said the state would come out with a “better” Medicaid system.

The General Assembly also approved today another key component of  Medicaid reform, House Bill 5007. The measure would allow Cook County to add to the Medicaid rolls an estimated 250,000 people who would become eligible in 2014 under the Affordable Care Act. The move to add more enrollees would let Cook County receive federal matching funds for an estimated 100,000 of those patients who are currently getting free treatment at county hospitals. Those pushing SB2840 noted that some patients who would lose services under the bill would be covered by such a Cook County expansion. The federal government would have to sign off on the plan, and no tax money from outside of the county would go toward the expansion.

The push to reduce Medicaid costs comes in the wake of Quinn’s “rendezvous with reality” budget address in February, when he told lawmakers they could not go home for the summer until they pass comprehensive Medicaid reform and called on a Medicaid working group to help solve a $2.7 billion crisis — an amount Quinn says would carry over into 2014 if lawmakers do not act now. “I assure you that if we do nothing, it will collapse,” said Rep. Sara Feigenholtz, a Chicago Democrat and sponsor of the bill.

Some of the most controversial cuts in the plan are the eliminations of maintenance dental care for adults and Illinois Care Rx, which is a prescription drug program that helps low-income seniors pay for their medicine. Approximately 180,000 seniors would be affected by the loss of the Illinois Care Rx program. The cut to adult dental care would affect 172,000 Illinoisans. “We believe that these cuts in human terms are very damaging. People will not get less sick because we made these cuts,” said William McNary,
 co-director of Citizen Action/Illinois. According to McNary, the cut to the Illinois Rx program is the biggest reduction in the plan, and it will cost the state more in the long run if seniors are not able to get the prescription drugs they need and end up in nursing homes.

Under the reductions, adults who have oral infections could get a tooth pulled. But Dave March, director of government relations for the Illinois State Dental Society, said most oral surgeons, who would perform an extraction in an emergency situation, do not take Medicaid. He said patients with oral infections often end up in emergency rooms, which have little to offer them. “All they can do is give them antibiotics and send them away.” He said that such infections left untreated can turn into life-threatening abscesses.

Those who opposed SB 2840 argued there are other options legislators could have considered, such as fund sweeps, applying sales tax to services and closing some of the corporate loopholes to help the state bring in more revenue instead of cutting Medicaid. “There’s lots of things, ladies and gentlemen, we can do rather than putting senior citizens and disabled people out on the street without having access to their health care,” Chicago Democratic Rep. Mary Flowers said during floor debate.

Members of the Black Caucus and the Latino Caucus came out strongly against the bill in both legislative chambers. “Once we push that green light, are we pushing people into the grave? That’s the question that we really need to ask ourselves,” said Sen. James Meeks, a Democrat from Chicago.

Proponents acknowledged the pain that the plan would cause but said the changes are needed to keep the system from collapsing because the state cannot afford to reimburse providers. “There are going to be people who get benefits today under the Illinois Medicaid program … who will no longer receive them. Or they’re not going to receive them in as convenient of manner as they do today, and that’s going to be tough on some people,” said Sen. Dale Righter, who served on the legislative working group that negotiated Medicaid reform.

“This is not immoral,” said Sen. Matt Murphy, a Palatine Republican. “What would be immoral in my mind would be to sit back, pretend there’s no problem” and let the system fall apart.

The measure that passed today would rely on other proposals that the General Assembly has not yet approved, such as a cigarette tax that could possibly generate $331 million with a federal match. Quinn is urging lawmakers to pass the tax. This is the first step toward saving Medicaid for those who rely upon it. “The status quo would have led to Medicaid’s collapse, and I am pleased to see the General Assembly take strong action to put our Medicaid system and our state on the path to sound fiscal footing,” Quinn said in a prepared statement. “And there is more work to do. The General Assembly must move quickly to pass legislation to add a dollar a pack to the cost of cigarettes, which — combined with today’s legislation — will achieve the necessary $2.7 billion in savings to rescue Medicaid.”

Righter, a Republican from Mattoon, warned that some of the reforms would need federal approval and that DHFS would have the last word on whether many of the changes are made in practice. “No one should walk away from this chamber tonight … and say, ‘We did our part, didn’t we?’ That would not be true,” he said. “We are going to have to work with and push and provoke the administration to move forward on all of the things that are in this bill.” Righter and other Republicans accused Hamos and Quinn of stalling previous Medicaid reforms by not being aggressive enough when seeking federal waivers.

Hamos said DHFS is committed to making the changes that are in the bill. She noted that the agency moved ahead with previous reforms without permission from federal officials. “You know that last year, I ran into some problems with the federal government. I expect to again. We challenged them. We did, in a very public way, take them on. They were unhappy then. They’re still unhappy with us. I expect that to happen again. I expect that there might be some lawsuits. But I’m the one who's responsible,” Hamos said.

 She added: “My agency is taking this very, very seriously. We have been fully engaged. We really believe in this. We really believe that it’s hugely important. …We have just a gigantic task ahead of us. I know that. I believe it. I don’t sleep well at night. But we are fully engaged and will do everything possible.”